The deal with the 30% withholding rate for int'l players...

[teddyFBI]

So I'm Canadian, and when I cashed last week in an event, the payout people told me that one of two things would happen:

i) If I was an American resident and had a SS#, I would get my entire payout, but they would also issue me a W-2 (and also send one to the IRS, obv).

ii) If I was foreign (which I am: Canada), they would immediately take a 30% cut out of the payout (but that depending on my country's tax treaty, I might be able to get it back by filing some forms with them and what not)

OK, both of the above things I was prepared for, but the more I think about it, the more it feels like something's wrong, and I wanted to run it by a forum where some people might be better informed than I. Here's the problem, as I see it:

There are two ways that this problem manifests itself:

#1 - Let's say I buy in to a WSOP tourney for $1,000, and I make the lowest payout cut for a $1,800 payday. Shouldn't they ONLY take a 30% cut of my WINNINGS? (e.g. $800)??? Because when I sat in the Payouts office, I'm 100% sure she did not deduct the tourney entry fee before calculating the 30% cut. In the example above, this would result in a $540 withholding (30% of $1,800), whereas it seems like they really only should have withheld $240 (30% of $800)-- do I have a legit beef or no?

#2 - I think they really should look at my WSOP in the aggregate, before determining what my winnings are (if any), and only THEN take the 30% cut. For example, let's say I cash in a $1,000 buy-in event for $5,000 (for a $4,000 profit). Let's also say that in the next week, I enter 4 more $1K buy-in tournies but don't cash in any of them. So over the course of that week, I paid $5,000 in entry fees and cashed for $5,000 leaving me with zero net profit. I'm of the opinion that they really shouldn't take a 30% withholding of ANYTHING (where's my profit, after all???). But that's not how they operate: they take a 30% cut of my $5,000 payout, actually leaving me *in the negative*, despite me not having made a dime over that week.

Anyway, what say you about the 2 issues above -- do I have legitimate concerns? And more importantly, where can I go to learn more about just how I can get this $ back from the CDN gov?

[gobboboy]

Why do you hate freedom?

[GTL]

[ QUOTE ]
Why do you hate freedom?

[/ QUOTE ]

because he's a terrorist? a canadian terrorist?

ps - i heard about this last year and had the exact same question. was the 30% taken out of profit or the total payout? I am american though, so it didn't effect me. good luck finding out some answers.

[woodguy]

The aggregate is your wins/losses for the year. You cannot expect the casino/irs to know or care how much you are playing in the WSOP.

The reason they tax the whole prize you get, and not just the amount over the buy in is because you use your buy in receipt for tax purposes later when you file. Otherwise it would be a double dip.

Keep your buyin receipts and track pit losses (if any) with a player card and you can apply to get some of the $$$ back.

Regards,
Woodguy

[olieovie]

When I stayed in Canada three years ago, I stayed at a hotels in Quebec in Montreal. I told the hotels I was an American citizen and would be applying to the Canadian government to get the non-provincial taxes back. So I said, why not just charge me no tax to begin with and save everybody the extra paperwork. And, believe or not, they said no.

I'm sure you can think of several reasons why the answer "no" makes the most sense.

[Russ Fox]

The US-Canada Tax Treaty specifies this treatment for gambling winnings. The withholding (30%) is out of the gross win, not the net.

You can file Form 1040-NR after the year is over to get back some (to all) of what was withheld. Note that you are supposed to report all of your gambling winnings (including wins where no W-2G/1042-S was issued), but you do get to report your losses (up to the amount of winnings). If you do not have a TIN (taxpayer identification number), you will also have to apply for that concurrent with your Form 1040-NR.

-- Russ Fox

[Triggerle]

Just out of curiousity, how would that work with a jurisdiction that doesn't tax gambling winnings and also has no reporting requirement of them (like Germany)? Is there a field in the form where I can put the fact that gambling winnings are totally off the radar with regard to my country's IRS?

[Rottersod]

[ QUOTE ]
So I'm Canadian...

[/ QUOTE ]

That's when I stopped reading. [img]/images/graemlins/wink.gif[/img]

Seriously, the WSOP is not an aggregate poker tourney, it is a series of events with their own buy ins and payouts so you you get your winnings withheld for each one. And the IRS (not sure about the Canadian equivalent) only cares about gross earnings unless you qualify as a poker pro in which case you can net your earnings out at the end of the year.

[talentdeficit]

[ QUOTE ]
Just out of curiousity, how would that work with a jurisdiction that doesn't tax gambling winnings and also has no reporting requirement of them (like Germany)? Is there a field in the form where I can put the fact that gambling winnings are totally off the radar with regard to my country's IRS?

[/ QUOTE ]

i'd like an answer to this too. i am a uk citizen with a uk passport.

[ryanghall]

That's why after this year I'll be looking to play EPT etc. rather than US tournaments.

Ryan